The Keyhole makes observations about consumers, brands, ads, & marketing, through a predictive customer loyalty lens. Most marketing is ineffective to today's bionic consumer, given undifferentiated products, loss of "brandness," & hard to come by profits. Marketers talk about "engagement" but nobody seems to be doing a very good job measuring or integrating it into what they do & it shows! The Keyhole opens a dialogue on this subject & suggests real-world solutions with the marketing community.

Saturday, October 29, 2016

More than a third (35%) of the 2016
Brand Keys Loyalty Leaders are represented by digital technology, social
networking brands, or brands that facilitate digital tech or social networking.
That was one of the key findings in the 20th annual Loyalty Leaders survey.
And while digital brands not only represent the lion’s share of this year’s
list, they also command 80% of the top 20 loyalty leaders spots as well.

Loyalty
Is a Gift and a Curse

Consumers haven’t entirely deserted
traditional brands. The largest loyalty shifts this year have been in more
traditional areas like apparel retail and athletic footwear, which for brands
turns out to be both a gift and a curse.

Gift-wise
loyalty is a leading-indicator of positive consumer behavior toward brands. Oh,
and loyal consumers are six times more likely to behave better toward that
brand.

The “Curse” aspect means it’s getting more difficult for non-digital
brands to create the kind of emotional engagement consumers desire – for
connection and distinction, tailored to ever-increasing consumer expectations
regarding customization of products, services, and experiences. This
environment forces brands to work harder to create emotional engagement. Want
to know what consumers are going to do?
Measure loyalty and emotional engagement.

2016
Top 20 Brand Keys Loyalty Leaders:

(Numbers in parentheses indicate last
year’s brand ranking)

Google: search
engines (#6)

Amazon: online
retail (#8)

Apple: tablets
(#4)

Netflix: video
streaming (#1)

Facebook:
social networking (#5)

Apple:
Smartphones (#3)

Amazon:
tablets (#2)

YouTube:
social networking (#7)

Amazon: video
streaming (#10)

WhatsApp:
instant messaging (#9)

iTunes: video
streaming (#13)

PayPal: online
payments (#18)

Dunkin’
Donuts: coffee (#17)

Samsung:
smartphones (#11)

Nike: athletic
footwear (#31)

Ford:
automotive (#22)

Uber:
app-based rideshare (#21)

Starbucks:
coffee (#40)

LinkedIn:
social networking (#16)

Zappos: online
retail (#12)

Loyalty’s Rule of Six

The kind of loyalty generated by leader
brands means consumers are six times more likely to use the brand’s products
and services in other categories too, which makes it harder for others to break
into the top 100, let alone the top 20. This year Brand Keys examined 635
brands in 72 categories. To compound the challenge of rising to, say, the top
20, a number of brands ended up bein represented in multiple categories, like
Amazon (which appears in the top 20 in three categories: Online Retail, Tablets,
and Video Streaming). Google, which moved up five spots to rank #1 this year
and was represented in both Search and Online Payments and Apple, which was
rated highly in the Tablets, Smartphones, and Video Streaming categories.

Category
Loyalty Leaders. Digital and. . .

Digital technology and social
networking brands had the most Loyalty Leader brands, and represented 35% of
the 2016 list. Other categories represented by Loyalty Leader brands included:

Brands that slipped from the top 100
included all hotel brands that had
made last year’s list: Ritz-Carlton, W Hotels, Hyatt, and Hilton, a partial
explanation of Airbnb’s spectacular first showing. Other brands that fell from
this year’s top 100 include Neutrogena, Revlon, Macy’s, FIFA, and HTC
Smartphones.

2016’s
Biggest Loyalty Winners

Loyalty and emotional engagement are
leading-indicators of consumer behavior toward a brand. That equation looks
like this:

Loyalty + Emotional Engagement = Positive Consumer Behavior
= $$$$

Axiomatically, the better consumers
behave toward a brand, the better the brand does in the marketplace, which
ultimately shows up on brands’ bottom lines. The 7 brands (including ties) that
showed the greatest loyalty leadership gains were:

Starbuck’s
(+22 to #18)

Ralph Lauren
(+19 to #24)

Nike (+16 to
#15)

LG (+15 to
#31)

Domino’s (+15
to #43)

HBO GO (+15 to
#63)

Under Armour
(+13 to #28)

The
Biggest Loyalty Losers

The 5 brands with the greatest loyalty
erosion included:

Chipotle (-45
to #68)

Estee Lauder
(-34 to #87)

eBay (-26 to
#64)

Clinique (-21
to #97)

GAP (-20 to
#93)

The bottom line? No matter the
category, brands that understand that emotional connections serve as surrogates
for added value, have succeeded.And
brands that have made loyalty and emotional engagement a strategic priority
always appear high on the Loyalty Leaders List, and always appear at the top of
consumers’ shopping lists.

Methodology

Brand Keys Loyalty Leaders analysis was conducted in
September 2016 and includes assessments from 42,792 consumers, 18 to 65 years
of age, from the nine US Census Regions, who self-selected the categories in
which they are consumers and the brands for which they are customers.
Seventy-five percent (75%) were interviewed by phone, 20% via face-to-face
interviews (to account for cell phone-only consumers), and remaining consumers
assessed categories and brands online. The 2016 Loyalty Leader assessments
examined 72 categories and 635 brands.

Unlike economic use models, which rely
heavily on historical data and profitability conjecture, the Brand Keys Loyalty
and Engagement Model and rankings are 100% consumer-driven, and are predictive,
leading-indicators of brand and corporate profitability. The good news is that
brand loyalty is understandable. The better news is, it can be quantified and
predicted. And, today, knowing what’s coming down the road from a category and
competitive perspective is an extraordinarily powerful advantage that brands
shouldn’t really pass up.”

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

Sunday, October 02, 2016

You hear a lot about how brands are supposed to be “authentic,” although
you’re likely to hear different definitions from different brands, some related
to category, some related to experience, and some actually even related to
brand, with some designations more plausible than others. Brand Keys views
“brand authenticity” as a set of values – the most leveragable of which are
emotional – that a brand can believably own.

The critical words in that last phrase was “believably own” because it
turns out that there’s an enormous difference between a brand saying something,
a brand doing something, and a brand doing something believably. If it helps,
think of it as a brand’s emotional version of “a promise made, should be a
promise kept.” In a world where consumers talk to themselves before they talk
to brands, you definitely want consumers to feel that your brand is keeping its
promises – or the promises you make about your products or services – and,
thus, protect your brand’s authenticity.

In the Retail sector, “authenticity” has a lot to do with “trusting what
the brand says or sells,” which has a lot to do with “brand reputation,” which
has a lot to do with “customer loyalty,” which has a lot to do with “sales,”
which has a lot to do with... well, you get the point. This is true in
all Retail sectors, but more particularly in the sub-category “Discount
Retailers.”

In a category where low-lower-lowest prices correlate so very highly with
the perception of value and product primacy, consumers ask the question, does
the product deliver on what was promised and do I feel I received real value?Authenticity is why responsibility for things
like illegal child labor practices ultimately came back to haunt discount
retailers. They weren’t running the sweatshops, but who else was the customer
to blame? Sure, cheap is cheap, after all. But do consumers really care where a
product is manufactured? Or how? Or if it’s exactly up to specs? Or whether
political prisoners are sewing soccer balls with their teeth? The easy,
intuitively obvious and rational answer is, of course “yes,” but brand loyalty
research in the Discount Retail category proves it’s so. And to a much larger
extent that has previously been assumed.

A recent Brand Keys study examined Target, Walmart, and Kmart shoppers
and measured the connection of authenticity to actual behavior in the
marketplace. It turns out that people who felt the brand more “authentic,”
shopped the brand six times more frequently, bought more products from that
retailer, and were also more likely to rebuff competitive offers, especially
one that were price-based. They don’t call it “Discount Retail” for nothing!

So an authentic brand yielded more loyal customers. But it also turns out
that “authenticity” is strongly related to expectations consumers hold for
primacy-of-product, the head-nodding response to the question, “Did I get what
I paid for?”

These findings were most-recently face-validated when Target pulled
Welspun India Ltd.’s products from their shelves after the brand’s
investigation found they couldn’t guarantee that the products were actually
100% Egyptian cotton as advertised.

The following week Walmart announced that it would stop selling the
“Egyptian” cotton sheets made by Welspun because they couldn’t attest to the products legitimacy. They removed all
products from their shelves and have offered customers a full refund. They
donated the sheets to some good cause.

But it turns out that Welspun has not used actual Egyptian cotton in
their products for two years. Oops! And if that’s not enough to have you
question the authenticity of products you buy, the Cotton Egypt Association,
which certifies suppliers, estimates that 90% of products labeled “Egyptian
cotton” are inauthentic, or the precise opposite of “authentic.”

Good brand marketers need to understand that not only must their brands
be authentic, but their products must be authentic too. And while our studies
have confirmed that precept, perhaps Shakespeare said it best:

This
above all: To thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.

Particularly it you want loyal
consumers.

Find out more about what makes customer loyalty happen and how Brand Keys metrics is able to predict future consumer behavior: brandkeys.com. Visit our YouTube channel to learn more about Brand Keys methodology, applications and case studies.

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About Us

Robert Passikoff, founder and president of Brand Keys, is a sought-after speaker and global thought leader on engagement and loyalty. He has pioneered work in these areas, creating the Customer Loyalty Engagement Index and the Sports Fan Loyalty Index. New York University’s communication school has declared Dr. Passikoff “the most-quoted brand consultant in the United States.”